Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $386,000. Overhead costs incurred in April are: indirect materials, $57,000; indirect labor, $26,000; factory rent, $40,000; factory utilities, $20,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $645,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	28,000			$	39,000
Direct labor			25,000				17,000
Applied overhead			12,500				8,500
Costs during April
Direct materials			135,000				205,000			$	115,000
Direct labor			104,000				152,000				104,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in Process Inventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2. Prepare journal entries for the month of April to record the above transactions.

Record the entry for Materials purchases (on credit).

Record the direct materials used in production.

Record the Direct labor paid and assigned to Work in Process Inventory.

Record the indirect labor paid and assigned to Factory Overhead.

Record the entry for Overhead costs applied to Work in Process Inventory.

Record the cost of indirect materials used.

Record the cost of factory utilities, paid in cash.

Record depreciation on factory equipment.

Record the cost of factory rent, paid in cash.

Record the entry for transfer of Jobs 306 and 307 to Finished Goods Inventory.

Record the Cost of goods sold for Job 306.

Record the revenue from the sale of Job 306.

Record the entry for assignment of any underapplied or overapplied overhead to the Cost of Goods Sold.

Answer 1

		Debit	Credit
1	Raw materials inventory	590000
	Accounts Payable		590000
2	Work in Process inventory	455000
	Raw materials inventory		455000
3	Work in Process inventory	360000
	Cash		360000
4	Factory overhead	26000
	Cash		26000
5	Work in Process inventory	180000
	Factory overhead		180000
6	Factory overhead	57000
	Raw materials inventory		57000
7	Factory overhead	20000
	Cash		20000
8	Factory overhead	58000
	Accumulated depreciation -factory equipment		58000
9	Factory overhead	40000
	Cash		40000
10	Finished goods inventory	854000
	Work in Process inventory		854000
11	Cost of goods sold	356500
	Finished goods inventory		356500
12	Cash	645000
	Sales		645000
13	Cost of goods sold	21000
	Factory overhead		21000
Workings:
From March
Direct Materials	28000	39000		67000
Direct Labor	25000	17000		42000
Applied overhead	12500	8500		21000
Beginning goods in process	65500	64500	0	130000
For April
Direct Materials	135000	205000	115000	455000
Direct Labor	104000	152000	104000	360000
Applied overhead	52000	76000	52000	180000
Total costs added in April	291000	433000	271000	995000
Total costs (April 30)	356500	497500	271000	1125000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Goods in process inventory
	Actual factory overhead:
	Indirect materials	57000
	Indirect labor	26000
	Factory rent	40000
	Factory utilities	20000
	Factory depreciation equipment	58000
	Actual factory overhead	201000
	Applied overhead	180000
	Underapplied overhead	21000